i just finished an arduino sketch that allows decent audio processing with just a few resistors and capacitors. the arduino sketch is up here:

http://wiki.openmusiclabs.com/wiki/PWMDAC

it takes in audio on ADC0 and uses a dual pwm to create 16b audio out. you can process the audio in-between and make a low-fi effects pedal. it can be used for just analog out as well, and is much higher quality than using analogwrite (although more complicated too).

yes, its primarily for doing guitar/voice effects on the cheap. but, the pwm side is just a generic setup routine to configure the pwm for various data rates and bit depths, so that can be used for any audio application.

Update on the hardware side of this project.Links to all the helpfull and informative information sourced so far.

http://www.instructables.com/id/Arduino-Guitar-Pedal/?ALLSTEPS

http://www.instructables.com/id/Arduino-Audio-Input/?ALLSTEPS

http://wiki.openmusiclabs.com/wiki/MiniArDSP

http://provideyourown.com/2011/analogwrite-convert-pwm-to-voltage/

http://www.instructables.com/id/Lo-fi-Arduino-Guitar-Pedal/

https://github.com/telamon/ArduinoDSP

http://www.openmusiclabs.com/projects/codec-shield/

http://www.planetz.com/intro-to-diy-pedal-building/#more-1883

http://www.planetz.com/building-an-idevice-guitar-interface-cable/

I need to address the Resistor Values and also the reference ground voltage and also one of the capacitor values in this circuit.

I am encouraged with progress to date the next stage of the project is interfacing the guitar signal with Pure Data and adding additional controls as set out in the first videoso some more reading on Pduino.

These are really just bench notes again on progress to date still unresolved are the 5 way selector switch hack for the Pickup replacer selection so very much a work in progress.